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State saves California power giant
bbcnews.com ^
| oct-3-2001
| bbcnews
Posted on 10/03/2001 10:47:54 PM PDT by green team 1999
Wednesday, 3 October, 2001, 19:35 GMT 20:35 UK
State saves California power giant
The state's energy crisis is entering its second long year
California officials, in a last-minute manoeuvre, have staved off bankruptcy for Southern California Edison (SCE), the state's second largest utility, saving it from a fate already suffered by the state's biggest electricity and natural-gas provider.
State officials have worked feverishly to keep California on the go
California utilities have faced trying times following the state's adoption of utility deregulation five years ago.
The California Public Utilities Commission (CPUC) and SCE's parent firm, Edison International, reached agreement late on Tuesday in a deal that allows the utility to recover the costs it incurred in purchasing electricity.
Governor backs deal
The pact means SEC could recover as much as $3.3bn (£2.2bn) in costs, according to early estimates.
California Governor Gray Davis backed the deal, saying the agreement "protected the public interest and will allow the state's second-largest utility to return to financial health."
Governor Gray Davis' popularity has waned during the crisis
In the last year, SCE has accumulated $3.9bn in debt as it was forced to supply electricity at rates cheaper than it was buying it for.
The state's deregulation laws prevented SCE from passing on those costs to its 11 million customers.
The action also resulted in Governor Davis cancelling a special state-legislative session due to commence 9 October with the hope of solving the utility companies' financial problems.
Governor Davis was harshly critical of Pacific Gas & Electric (PGE), the state's largest utility, when it filed for bankruptcy in April.
Bond deal fails
Earlier Tuesday, the CPUC defeated a bond deal, which passed the state legislature in May. The plan called for $12.5bn in bonds to be sold to the public to help restore the state's fiscal health.
The state stepped in to buy emergency power when electric utilities, strapped for cash, could not afford to do so.
The CPUC said the deal was costly and might result in the regulatory agency losing its authority to regulate utility prices.
State Treasurer Phil Angelides said the state faces a $9bn budget deficit for the 2002-2003 fiscal year if the bonds are not sold before next July.
Governor Davis criticised the CPUC rejection of the bond deal, calling the agency's 4-1 vote "an irresponsible act".
The Governor said, "it creates uncertainty about our ability to sell the bonds necessary to repay the general fund when California can least afford additional fiscal uncertainty."
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budget will be short just 9 billion dollars,and who will pay for it?????
To: green team 1999 CALPOWERCRISIS
Missed see this!
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To: green team 1999
Gray Davis cannot run a state like California. It's way over his head.
3
posted on
10/08/2001 12:02:45 PM PDT
by
boycott
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